Orange County is millions over budget and years behind schedule in upgrading its crucial-yet-outdated system to track what people owe in property taxes. And, county officials say they’ve been finding glitches in the proposed software that they are working to fix before it goes live.
The system – known as ATS for the Assessment Tax System – handles over $7 billion per year in property taxes in Orange County that fund everything from schools to law enforcement.
And the county’s current system is ancient – created in 1987 on an obsolete programming language that few people know how to code today.
Years ago, county officials set out to create a new system to replace it, scheduled to finish in August 2019.
It’s now more than two years late.
The original price tag has also nearly doubled – from $7.5 million to about $14 million.
And county officials say they’re “finding a significant number of defects” as they test the system, contributing to the delays.
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Asked about the delays, overruns, and glitches, Orange County’s elected Treasurer-Tax Collector Shari Freidenrich said the project is now on track within the latest budget and schedule.
“I reviewed the report and recognized that both schedule and budget show as red, but we have revised the schedule and budget and we are within schedule and budget currently,” Freidenrich, who is helping oversee the project, said in an email to Voice of OC.
She was referring to the newer plans after overruns that doubled the original price and added more than two years to the schedule.
Asked for more info about why the project’s gone over-budget and behind schedule – and who’s paying for the overruns – Freidenrich referred comment to the lead project manager: county Auditor-Controller Frank Davies.
In an interview, Davies said one of the biggest reasons the cost went up is the contractor’s original price quote was based on using an automatic system from the contractor to save time, but it didn’t end up working out.
“The county has to rely on those quotes, and based on the lowest responsible bid, that’s generally the way the county has to go,” Davies said.
“In this case, the vendor had a more automated type of tool that would help translate the code from the [outdated] IDEAL language to more modern, or the Java language, and unfortunately that automated tool didn’t work as well as the developer thought,” he added.
“So there had to be [a] more manual type of coding programming involved. And that was one of the bigger aspects of why the increase in cost, as well as in the [extra] time involved with the project.”
Asked why taxpayers are footing the bill if a vendor doesn’t deliver as promised, Davies said that gets into “the legal aspects with regard to contracts, that I really can’t get into.”
“It’s understandable that I think with a lot of IT projects – and other projects as well – where a promise is made to come up with a product…under a certain time and monetary budget, and that doesn’t happen,” he said.
“It’s frustrating in this case…But in order to get to a good place with regards to the project, and completion of the project, unfortunately there has to be that additional work to be done, which calls for additional expense.”
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The vendor on the project is Perspecta, which was acquired earlier this year by the government IT giant Peraton.
Peraton spokesman Brian Wagner deferred comment to the county when contacted for the company’s response.
County officials also attribute part of the delay to the coronavirus pandemic.
“There has been an impact to the project from COVID-19 and its remote working requirements. Though the project continues to move forward, a certain level of productivity and synergy have been lost due to the remote working model,” county officials wrote in their quarterly update.
“The team is not as effective or efficient as when combined as a single unit at one county managed location. Additionally, team members have contracted the coronavirus, which has had some impact,” the document states.
As for the system itself, Davies said it handles a complicated set of legal requirements to figure out how much property tax is owed for each of nearly a million pieces of real estate across the county.
“A property tax system is very complicated, mainly because property tax and the laws that have to be followed are very complicated,” Davies said.
“We do have roughly a million parcels, [and] the various laws that govern property tax create that complexity,” he added.
“Our project is really more of an upgrade from the old computer language to a more modern language that will provide for better maintenance,” including as property tax laws change.
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The programmers who can actually code the existing outdated system are reaching retirement, Davies said, creating an urgency to replace it.
“We wouldn’t have the support going forward, with our developers’ age getting into retirement age and not being able to find people that knew that [programming] language,” he said.
“So it was important that we be able to have a good, functioning system that’s supported in case there are issues that come up. Or if there is new legislation that comes out that requires changes in the programming. Or just looking at making things easier on the taxpayer side, property-owner side” with payment systems, Davies said.
The doubled, $14 million cost is close to what the runner-up company bid for the project years ago, he added in a follow-up email.
Problems with IT projects have long plagued the county government.
Unexpected cost overruns — also known as “change orders” — have been commonplace in Orange County’s approach to technology services.
Two of Orange County’s top IT managers were forced out years ago, and another high-level manager was charged with seeking bribes from a subcontractor, according to published reports.
Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.